Challenges of Applying Blockchain Technology

Abstract

Due to the fact that modern computers have “perfect memory” and can process a huge number of transactions through a computer network very quickly, the idea of a decentralized currency system is not a new thing and it has long been a dream of advocates of the concept of anonymous digital money. Satoshi Nakamoto has come up with a genius idea to create a system that is a digital abstraction book of the balance and make that system public for all practical transactions related to accounts and transactions, which, when simplified, are reduced to mere addition and subtraction operations. He used the digital media feature to make perfect own copies, so he distributed this copy of the balance book to every computer in the network (decentralized system) and obtained a unique (structurally unchangeable) and global (public) book of balance. Thus, a revolutionary blockchain technology was created, which initially enabled and supported the functioning of the first digital crypto currency - bitcoin. Blockchain technology is an amalgam of several different and equally revolutionary technological achievements in the field of cryptography and computer networks. The aim of this paper is, using Bitcoin as example, to briefly explain the functioning of this technology and its suitability for use in many other areas of human activity, especially those that have a problem of distrust and the possibility of fraud.